Oil prices lower in Asia on gasoline worries
Wednesday, 27 June 2007
SINGAPORE, June 26 (AFP): Oil prices were lower in Asian trade today in a market underpinned by below-normal gasoline (petrol) inventories in the United States, dealers said.
At 3:00 pm (0700 GMT), New York's main oil futures contract, light sweet crude for delivery in August, was 21 cents lower at 68.97 dollars a barrel from 69.18 dollars in late US trades Monday.
Brent North Sea crude for August was down 36 cents at 71 dollars.
"We have the below normal inventory levels of gasoline in the US continuing to underpin the market," said Victor Shum, senior principal at Purvin and Gertz in Singapore.
Shum said US crude oil inventories are at a nine-year high but persistent refinery outages continue to stir concerns over the ability to meet demand as the peak summer holiday driving season continues in North America.
"It's really the tail wagging the dog. It's the product, gasoline, driving the crude market," Shum said.
Analysts from Societe Generale said US gasoline demand keeps growing and seems on track to challenge a record set in July 2005.
London-based Centre for Global Energy Studies warned Monday that the price of oil will soar in the coming months unless the Organisation of the Petroleum Exporting Countries (OPEC) ramps up output.
"The world needs more oil if another price surge is to be avoided," the influential energy research group said in a monthly report.
But Shum said any significant increase in production is unlikely to help while refineries still face problems processing the crude.
At 3:00 pm (0700 GMT), New York's main oil futures contract, light sweet crude for delivery in August, was 21 cents lower at 68.97 dollars a barrel from 69.18 dollars in late US trades Monday.
Brent North Sea crude for August was down 36 cents at 71 dollars.
"We have the below normal inventory levels of gasoline in the US continuing to underpin the market," said Victor Shum, senior principal at Purvin and Gertz in Singapore.
Shum said US crude oil inventories are at a nine-year high but persistent refinery outages continue to stir concerns over the ability to meet demand as the peak summer holiday driving season continues in North America.
"It's really the tail wagging the dog. It's the product, gasoline, driving the crude market," Shum said.
Analysts from Societe Generale said US gasoline demand keeps growing and seems on track to challenge a record set in July 2005.
London-based Centre for Global Energy Studies warned Monday that the price of oil will soar in the coming months unless the Organisation of the Petroleum Exporting Countries (OPEC) ramps up output.
"The world needs more oil if another price surge is to be avoided," the influential energy research group said in a monthly report.
But Shum said any significant increase in production is unlikely to help while refineries still face problems processing the crude.